Why is Reference Based Pricing a Big Deal?

 The right insurance coverage can be challenging because so many options are available today. One of the most important decisions you will have to make as an employer is whether to offer a fully insured health plan versus one that is employer-funded. For fully covered plans, businesses typically pay premiums to their insurance providers. Employers who manage their own self-funded (self-insured) health plans have the choice to reduce costs and gain more financial control. Self-funded plans may use reference-based pricing in healthcare to determine the cost of claim alternatives.

What is Reference-Based Pricing?

Many businesses use reference-based pricing to cut back on the amount they spend on employee benefits. In contrast to more conventional pricing strategies, which try to negotiate a lower fee from hospitals or providers for billed services, the idea of reference-based pricing (RBP) is fairly novel.

What Advantages do Reference-Based Prices Offer?

Reference-based pricing is cost-transparent compared to conventional finance structures. Employers who choose RBP are typically able to control rising healthcare expenditures, preventing any adverse effects on their bottom line.

It's crucial to inform your staff that not all healthcare systems accept capped insurance plans, such as referential pricing. You could also wish to work with a vendor who offers great patient advocacy to guarantee that your staff members are more knowledgeable about balance billing. Being aware of the price of a certain surgery or therapy is a significant benefit of reference-based pricing in healthcare. If a patient's doctor is part of the network, a contract can be made with a healthcare provider to cover all of their services.

In difficult times, keeping healthcare expenditures low can help an employer's budget. Employers commonly use this pricing approach to charge less because hospital fees might vary widely. Finding the ideal price can be difficult. Before making a decision, consider the advantages and disadvantages to see if the proposed solution would be appropriate for your company.

Through SaaS-based Medicare web pricer tools like CMSPricer, you can access TPA services that can price all types of PPS claims, including editing claims for Medicare's reference-based pricing.